Energis rescue close to collapse

A DEAL to sell stricken telecoms giant Energis to a consortium of venture capitalists is close to collapse as customers abandon the company. One source close to the consortium said Energis had received the final offer and had until the end of this week to make up its mind. 'It is haemorrhaging customers and if too many leave, there's nothing left to buy,' he said.

Energis said in February that it was unlikely to be able to repay its debts, which include a £690m overdraft and more than £1bn in bonds. It has been struggling to agree a refinancing package.

At least two groups of venture capitalists initially expressed interest in bidding, but now only one remains, led by Apax Partners and Carlyle Group. This consortium has tabled an offer of about £600m.

An executive close to the company said the venture capitalists had until Wednesday to table a higher offer or the Energis creditors would go ahead with their own restructuring package.

But the collapse of WorldCom and the news on Friday that US giant AT&T has decided not to buy the network of defunct Dutch-American KPNQwest, means a higher bid for Energis is less likely. One industry source said: 'Nobody really needs another fibre-optic network. The only value is in the customers, and they are running away.'